2 High-Growth Stocks That Could Be Worth $1 Trillion In 10 Years, Or Sooner

A trillion dollars is a staggering amount of money. Yet investors are likely to value a select few enterprises at $1 trillion or more as their profits soar in the coming decade. Here's why Nvidia (NASDAQ: NVDA) and Tesla (NASDAQ: TSLA) are two of the most likely candidates to reach this elite level.


Nvidia's semiconductors power many of the largest and most important technology markets in the world today. Cloud computing, gaming, automotive tech, and robotics are just some of the industries in which Nvidia's chips command leading competitive positions.

Yet it's a nascent market that might emerge as Nvidia's most powerful growth driver: artificial intelligence (AI). Fast-growing AI applications, including the wildly popular ChatGPT, use Nvidia's chips to train their models. It's a rapidly expanding and potentially massive market -- one that will exceed $100 billion in annual revenue by 2030, according to Grand View Research.

Still, AI represents just a portion of Nvidia's total addressable market. Combined with its gaming, automotive, metaverse, and other segments, the chipmaker estimates its long-term market opportunity at a staggering $1 trillion.

Nvidia generated $27 billion in revenue and $4.4 billion in net income in its 2023 fiscal year, which ended on Jan. 29. That leaves plenty of room for expansion in coming years.

For its part, Wall Street expects Nvidia to grow its profits by over 21% annually over the next half-decade. Even if the chip giant's earnings growth slows to 15% annually in the subsequent five years, its net income would check in at roughly $23 billion.

For Nvidia to be valued at $1 trillion at that time, its stock would need to trade for about 43 times earnings. That's reasonable for an elite tech company with attractive long-term growth prospects. For context, Nvidia trades for 133 times trailing earnings and 53 times forward estimates at its current market cap near $585 billion.


Like Nvidia, Tesla (NASDAQ: TSLA) is a leader in a booming market. The electric vehicle (EV) industry is poised to grow exponentially in the coming decade, and the dominant EV maker stands to profit from this trend more than any other company.

Ark Investment Management projects that EV sales will grow by 50% annually to 60 million units by 2027, as falling battery costs allow automakers to reduce vehicle prices. If Ark's forecast proves to be even close to accurate, Tesla has a long runway for growth still ahead. The auto giant expects to produce 1.8 million vehicles this year, up from 1.3 million in 2022. That's just a small fraction of ARK's forecasted sales for the EV industry in the coming decade.

For his part, CEO Elon Musk wants Tesla to sell 20 million EVs annually by 2030. It's a daunting goal, one that would see Tesla account for roughly 20% of the auto industry's projected sales at that time.

Moreover, Musk intends to accomplish this with a limited number of vehicle models, perhaps as few as 10. That would be a drastic change in an industry that typically sees auto manufacturers offer a much wider variety of brands and models.

Tesla's current vehicle lineup includes its Model S luxury sedan, Model 3 mid-size sedan, Model X luxury SUV, Model Y compact SUV, and Semi truck. Additionally, the company is slated to begin production on its long-awaited Cybertruck by the end of this year. It's expected to be a strong seller, as Tesla reportedly has hundreds of thousands of reservations for the uniquely designed electric truck. Tesla is also taking reservations for its Roadster sports car, but with an expected price tag of roughly $200,000, sales of the new EV are likely to be limited.

Keeping its model count to 10 or fewer could allow Tesla to spend less on development costs and deploy a more consolidated production network. That, in turn, could boost Tesla's already impressive profit margins.

The EV titan's revenue surged 51% to $81.5 billion in 2022, while its net income soared 128% to $12.6 billion. Analysts expect Tesla's growth to moderate as it spends heavily to expand its manufacturing network. But if the company can increase its earnings by 12% annually over the coming decade, which is in line with Wall Street's estimates for the next five years, Tesla's net income would rise to a whopping $39 billion.

For Tesla to be valued at $1 trillion at that time, its stock would need to trade for about 26 times earnings. That would be a fair price to pay for a high-quality business with industry-leading profit margins and attractive growth prospects, which is likely to still be the case if Tesla's autonomous vehicle software, energy storage, or robotics initiatives prove successful. For further context, Tesla's shares trade for around 45 times trailing earnings today at its current $570 market cap.

Lastly, it should be noted that some investors are concerned that Musk's recent purchase of Twitter and his efforts to stabilize the social media company's finances might lessen his ability to successfully lead Tesla into the future. But Musk has said he intends to hire a CEO to succeed him at Twitter by the end of the 2023, which should free him to refocus more of his attention on Tesla.

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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